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Critically evaluate the organisational impact of mergers and acquisitions on the enlarged tourism firm - Essay Example

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The tourism sector, like many other sectors, has been actively involved in mergers and acquisitions as key players try to expand their businesses quickly by taking advantage of synergies that can be utilised as a result of cooperating with, or controlling other businesses. A…
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Critically evaluate the organisational impact of mergers and acquisitions on the enlarged tourism firm
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Download file to see previous pages Mergers and acquisitions need to be carefully considered, well planned and executed with great care because, although a decision to have an enlarged firm can provide an opportunity for growth, a failed execution can be costly, resulting in others attempting to takeover or control a part of the business. A merger or an acquisition is followed by a period of uncertainty in the enlarged organization as change managers try to execute plans and transform a vision into reality. It is necessary to try and pay attention to the human resources in the enlarged organization along with trying to utilize economies of scale and synergies, because those who have been interacting with the previously separate organizations can feel insecure, angry and frustrated with the change. Thus mergers and acquisitions bring about a period of uncertainty and chaos as spectators as well as share markets decide if the business decisions that were made or their executions have been sound. This brief essay presents a discussion of the organizational impact of mergers and acquisitions on the enlarged tourism organization.
Mergers and acquisitions have been very popular in nearly all sectors of the economy in the past decade because corporations have felt that there is a need to utilize economies of scale and to take advantage of the strengths which have been developed in specific organizations to provide lower operating costs in order to thrive in competitive times (Andersson, 2000, Pp. 1 – 10). In the tourism sector, mergers and acquisitions have had an impact on hotel chains as well as airlines and an increasingly larger number of firms have tried to join hands in order to survive or thrive. Shocks such as the September 11 terrorist attacks as well as higher aviation fuel costs, have encouraged firms associated with the airline or hotel businesses to combine their strengths in order to become economically competitive. An example of a recent merger in the airline ...Download file to see next pagesRead More
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